The US Leads Japanese Rice Import Market
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For decades, Japanese consumers have been eating less Rice in favor of more bread, meat, and edible oil, leading the country’s calorie-based food self-sufficiency ratio to fall to 37% in 2020 from 73% in 1965 — the lowest among major economies.
Faced with declining Rice consumption and demand from the politically powerful farming bloc to support prices, the Government used a variety of measures to reduce Rice production since around 1970. It currently offers subsidies to farmers who switch from producing Rice for the dinner table to other crops, including low-grade feed Rice and Rice used for flour.
Yet, demand is declining faster than production, and wholesale prices have fallen over 20% in the past decade, according to Government data. Currently, more Japanese farmers are planning to lower their Rice production and switch to wheat and soybean this year amid rising grain prices caused by Russia’s war in Ukraine, according to a government survey.
Among Japan’s 47 prefectures, 37 said as of the end of April that they would reduce cooking Rice acreage from a year earlier, up from the 22 prefectures that responded the same way in the previous January survey, reported the Agriculture, Forestry and Fisheries Ministry.
In 2019, the production volume of Rice in the Japanese agricultural sector amounted to under 7.8 million tons. Next to vegetable production, Rice has the second-highest production output of agricultural produce in Japan. Demand for Rice as a staple food in Japan in 2022 is forecast at 6.92 million tons, falling below 7 million tons for the first time, according to the Agriculture Ministry.
The estimated drop is due to the country’s declining population, the Ministry claimed in its latest guidelines on Rice production. It stressed the need to reduce Rice fields by some 40,000 hectares from this year to about 1.26 million hectares by encouraging Rice farmers to switch to other products.
Specifically, the Ministry plans to call on farmers to convert their Rice paddies to fields for soybeans and corn for animal feed to prevent a buildup in Rice inventories and stabilize the supply-demand balance for Rice.
Japan’s Rice Trade
In 2020, Japan imported Rice worth $463M, becoming the 15th largest importer of Rice in the world. In the same year, Rice was the 206th most imported product in Japan. Japan imports Rice primarily from: the United States ($270M), Thailand ($123M), China ($58.3M), Chinese Taipei ($6.59M), and Pakistan ($1.75M).
In June 2022, Japan’s Rice exports accounted for up to ¥653M, and imports accounted for up to ¥12.5B, resulting in a negative trade balance of ¥11.9B. Between June 2021 and June 2022, the exports of Japan’s Rice increased by ¥207M (46.2%) from ¥447M to ¥653M, while imports increased by ¥6.72B (115%) from ¥5.82B to ¥12.5B.
In June 2022, Japan exported Rice mostly to Hong Kong (¥196M), Singapore (¥132M), Taiwan (¥72.1M), the United States (¥70.9M), and Australia (¥40.9M), and imported Rice mainly from the United States (¥6.74B), China (¥2.1B), Australia (¥1.89B), Thailand (¥1.6B), and India (¥126M).
Japan is the second largest market for the US milled Rice and the number one milled Rice market in terms of value, importing exclusively japonica-type Rice from the US. World Trade Organization commitments require Japan to import 682,000 tons of Rice annually, of which the United States ships about 50%.
A maximum of 100,000 tons of imported Rice reaches the commercial market in unbroken form. Thus, market access improvements are required to allow true market access for the US Rice. Because the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was ratified excluding the US, additional access for US Rice into Japan is a priority for the US Rice industry in the upcoming the US-Japan negotiations.
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